Check the licence and custody arrangements of every brokerage account you hold against official registers.
Open the client agreement for one of your brokerage accounts and find the legal entity named in it. You already have that name on the list you made in lesson 1.1, and lesson 1.3 told you which protection scheme should apply. Most of that information came from the broker's own app and website, though. A broker saying it is licensed is only a claim. The next step is to test that claim against the official registers and the documents you signed.
Allow about 25 minutes for two or three accounts. Take one account at a time and go through every step for it, start to finish, before you move to the next. The results go into a broker check sheet, which has one row per account and these six columns:
legal entity regulator and licence evidence Investor Alert List result custody arrangement for each market protection scheme transfer-out method
Go to the MAS Financial Institutions Directory on the MAS website. Search using the exact legal entity name from the account agreement, and not the brand name shown in the app. Brand names and legal entity names often differ, and searching the brand can bring up the wrong company.
Record the licence or status the entity holds, in the directory's own words, and the date you searched. For a broker dealing in shares and ETFs, you would expect a capital markets services licence covering dealing in capital markets products, or an exemption listed by MAS. Banks often deal under their banking licence, so a bank's brokerage arm may show an exemption instead. Whatever the directory shows, copy it down exactly.
An international broker may be run by an entity licensed overseas, and that entity may not appear in the MAS directory at all. In that case, search the home regulator's register. Each major regulator publishes one on its website. Write down the regulator's name, the register entry and the date.
Hakim, an example learner, has a bank brokerage account and an international broker account. For the bank account, he searched the entity named on his statement, found it listed, and noted its status and the search date. That line took him three minutes.
The MAS Investor Alert List is a list MAS keeps of unregulated persons that may have been wrongly perceived as licensed or authorised by MAS. Search it for the broker's brand name and for close variations, such as the brand with an extra word added or a slightly different spelling. Scam sites often copy the name and look of real brokers.
If you get a hit on the exact name or a near match, stop and confirm you are on the real broker's website before you log in or transfer anything. If the search comes back clean, record that. A clean result does not prove a firm is safe, because new names are added all the time.
The client agreement is usually in your account settings or in the legal section of the broker's website. Search it for "custody", "custodian", "nominee", "client assets" and "segregation". You are looking for three answers: where your securities are held and by which custodian; whose name they are registered in, whether yours, the broker's nominee or the custodian's; and how client money is held, for example in a trust account at a named bank.
If you cannot find these answers, email the broker's support team, ask for them in writing, and save the reply.
Answer the questions separately for each market. Hakim found that his SGX shares settled into his own CDP account. They were registered in CDP's name, but CDP treats him as their owner. His US shares, bought through the same bank brokerage, were held by a custodian in a nominee account. As lesson 1.2 warned, one account can have two different custody arrangements.
Your transfer-out route is how you would move your shares to another broker without selling them. Search the broker's help pages for "transfer out", "outbound transfer" or "move shares".
SGX shares in a direct CDP account are registered in CDP's name, and CDP treats you as their owner. Check with CDP how using them through a different broker works. Overseas holdings with a custodian vary. The broker may support a transfer to another custodian, may charge a fee per holding, or may not support transfers at all. Record the method, any fee, and anything that cannot move. Fractional shares often cannot be transferred and would have to be sold first; lesson 6.3 covers fractional shares.
For his bank brokerage, Hakim's row reads: the bank's brokerage entity is listed in the MAS directory, with the status he copied and his search date; no Investor Alert List matches; SGX shares in his own CDP account, and US shares with a custodian in a nominee account; protection is MAS segregation rules, with SDIC covering only his linked savings account and not the brokerage holdings; SGX shares movable through CDP, and US shares transferable for a fee per holding.
His second row, for the international broker, took longer. The entity was licensed overseas, so he searched that regulator's register and wrote down its protection scheme from lesson 1.3. The broker's transfer-out page said fractions could not move, and he marked that cell in red.
Any cell you cannot fill is a finding. Write the question you would send the broker in the cell, and send it. Now fill in your own sheet, one account at a time, using the official registers and your own agreement rather than memory.
Fill in the broker check template for every account you hold, with licence evidence, custody arrangement, protection scheme and transfer-out method.
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